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Alcoa (AA), Bank of America (BAC), and Hewlett-Packard (HPQ) are being removed from the Dow Jones Industrial Average. They will be replaced with Goldman Sachs (GS), Nike (NKE), and Visa (V).AA -1.4%, BAC +0.2%, HPQ -1.4%, GS +2.6%, NKE +2.7%, V +2.5% premarket.
Wow. Not that I think DJIA is a solid index, since it's weighted only on price, but historically, a big deal.
I've always thought of the Dow as the poor mans blue chip dividend fund. The WSJ editors that run (or used to run) the index probably know just as much as anyone else about which stocks to pick, and don't charge any fees, aside from the 0.17% you pay for DIA. Why pay more?
My granddaddy used a Dogs strategy starting from the Great Depression, during which he stayed employed. By the late 50s when he retired he was all set. Of course this was an unprecedented run of blue chip stock gains. I've been trying it out myself for a few years but it's still more volatile and pays about the same dividends as my 40/40/20 allocation of stocks/bonds/munis. I'm 3 years or less away from retirement.
Now the only question I have is will DIA dump AA, BAC, and HPQ at once, and pay inflated prices for the new entries, of this going to be a gradual thing?
Comments
Regards,
Ted
http://online.wsj.com/article/SB10001424127887323595004579066683443715254.html#printMode
My granddaddy used a Dogs strategy starting from the Great Depression, during which he stayed employed. By the late 50s when he retired he was all set. Of course this was an unprecedented run of blue chip stock gains. I've been trying it out myself for a few years but it's still more volatile and pays about the same dividends as my 40/40/20 allocation of stocks/bonds/munis. I'm 3 years or less away from retirement.
Now the only question I have is will DIA dump AA, BAC, and HPQ at once, and pay inflated prices for the new entries, of this going to be a gradual thing?
Regards,
Ted
http://blogs.wsj.com/moneybeat/2013/09/10/dogs-of-the-dow-loses-a-dog/tab/print/